Speaking to analysts after the release of second-quarter results, Rafael Menin, co-chief executive of MRV Engenharia e Participacoes SA, said dividends and cash generation would likely increase in the second half of the year. The danger of falling behind with construction approvals - a perennial problem in Brazilian real estate - is low, he added, as MRV has already secured 70 percent of the needed permits.

Executives at Cyrela Brazil Realty SA, MRV’s more upscale peer, also expressed optimism, saying they expected to improve margins in the second half of the year, with a second dividend payout likely in 2018.

Both companies have been hamstrung recently by regulatory issues in the city of Sao Paulo, a key market of over 12 million people. Those issues have been largely resolved, however, which could mean a significant amount of new home launches in the third and fourth quarters.

Under the new regulations, Cyrela executives said, companies will be able to launch subsidized ‘Minha Casa, Minha Vida’ housing projects in Sao Paulo’s often-desirable central areas, which Cyrela plans to do in order to meet increased competition.

Executives at both companies played down the possibility of dramatic changes to the Minha Casa, Minha Vida program that could result from presidential elections this October, adding they were optimistic about recent regulatory changes allowing increased use of a fund known as FTGS to finance mortgages.

Shares in Cyrela had fallen 3 percent in early afternoon trade after the firm missed profit estimates, while shares in MRV fell 1.8 percent after roughly meeting expectations.

Brazil’s benchmark Bovespa index was off some 2.2 percent as a severe sell-off in the Turkish lira prompted an emerging markets shakeout. (Reporting by Gram Slattery; Editing by Steve Orlofsky and Jonathan Oatis)